Coinbase is a cryptocurrency wallet/exchange that was founded in 2012 and is based in San Fransisco. The digital currency exchange is said to serve about 20 million clients across 32 countries, led by the US. Within a year of its establishment, Coinbase became the highest-funded crypto startup and is currently the biggest exchange across the globe.
Coinbase’s original founding team was made up of Brian Armstrong, Fred Ehrsam, and Ben Reeves (Blockchain.info co-founder). They parted ways with the team because part of the team had different views on the way they wanted the wallet to operate. Armstrong and Ehrsam later enrolled in the 2012 Y-Combinator Startup incubator summer program.
In 2012, the company launched a platform for buying and selling Bitcoin and making use of fiat bank transfers.
The fast-growing crypto wallet and exchange received a Series A investment worth about $5 million USD. The investment funding was led by Fred Wilson of the Union Square Ventures. This investment was followed by a $25 million investment from Ribbit Capital, Andreessen Horowitz, and Union Square Ventures (all venture capitalist firms).
The following year, Coinbase gained its first million users and acquired other startups, including Blockr and Kippt. The company also ensured that the Bitcoins stored on its servers were insured, thereby upgrading its Bitcoin storage system to a more secure version. The exchange continued to grow and currently has about 25 million users.
Over the years, Coinbase has secured partnerships with several centralized tech giants, payment processors, and retails stores such as Dell, PayPal, Stripe, Braintree Dish Network, and Overstock so they could start accepting payments in Bitcoins.
What is Special about Coinbase?
Coinbase was once the number one Bitcoin exchange in the world in terms of the trading volume. With over 25 million registered users and about 150+billion exchanges made on the platform, Coinbase is one of the leading cryptocurrency exchanges.
Coinbase is also one of the very few cryptocurrency exchanges that allow fiat funding through debit cards as well as bank transfers.
When it comes to exchanging Bitcoins or other cryptocurrencies, Coinbase does not provide market-based trading. Coinbase sets the price for each coin. This way, Coinbase serves as a middleman, unlike other cryptocurrency exchanges that allow direct trades based on live market prices. The advantage for Coinbase users is that it makes it possible for them to buy or sell crypto coins quickly and conveniently.
Coinbase has enabled USA-based users to sell their Bitcoins in exchange for PayPal funds. This feature is expected to be available to European nationals soon.
Coinbase is also one of the few cryptocurrency exchanges that accept debit cards (in addition to bank transfers).
How to Open and register a new account on COINBASE
To open an account and register on Coinbase, visit their website, once you are there, locate the “Sign Up” button from a drop-down menu on the top right corner and click on it.
Go to your email and verify your account through the verification link. Choose your country, input your phone number, and then proceed.
A page to enter a 7-digit code that was sent to your phone will come up. Input the code, and then proceed.
Once you’ve entered the code, you will be directed to confirm your ID. If you are not directed to confirm your ID, it means the set up for your account is finished for now. If you’re not asked to verify your ID now, you will still have to when you want to purchase cryptocurrency.
Verifying Your ID
Coinbase has to abide by KYC/AML laws because they are based in the USA. The Know Your Customer (KYC) and Anti Money Laundering (AML) laws ensure that businesses verify the ID of their clients or customers. These laws help to prevent money laundering and other criminal activities.
This means that customers must give Coinbase a lot of personal information, including the last four digits of their SSN and their photo ID. If you were not asked to verify your ID after entering the SMS code, go to the “Buy/Sell” tab, then click on the “Submit ID + Photo Verification” button.
You can use a mobile camera, a webcam, or a file upload, to upload a clear photo of the front and back of your driver’s license or other photo ID.
Adding Payment Methods
You will need to provide your payment method before you can buy any cryptocurrency. There are three payment methods offered:
- Debit card
- Bank account
- Wire transfer
On the top, in the middle of the page, select the “Settings” tab to add a payment method.
Within the Settings page, select the “Linked Accounts” tab. Next, select the “Link a New Account” option.
You can then select the payment method you want to use.
For quick purchases of smaller amounts, a debit card is the best option. You get an instant transfer of cryptocurrency with any debit card purchase, directly into your account.
The issue with debit cards is that the purchase limits are much lower than other payment types, and a high fee of 4% is also attached to debit card purchases. Though Coinbase has its headquarters in the USA, Coinbase’s payment processor runs through the United Kingdom, meaning that, depending on your card and location, your card might be charged with an additional foreign purchase fee.
Select the “link debit card option”, to link your debit card, and then input your debit card information. You can’t use a credit card.
Once your card information is completed, two pending charges will be sent to your account by Coinbase. Enter the last two digits of the charge to verify your card. There are no charges for these transactions. If three charges are sent, ignore the one that is for $1.00.
For larger purchases, bank accounts are better, but they are not as fast as debit cards. If you make a purchase with a bank account, the price you pay is locked once you make your purchase. However, you won’t receive the cryptocurrency for 4-5 business days.
If the currency you bought increases in value against fiat over that time, you will make some extra money, but if not, you lose money. Another disadvantage is that the funds are not yours for 4-5 business days. That means you can’t trade until the time has passed.
However, a significant advantage of using a bank account is that it has much higher limits starting at $7,500 per week, and much lower fees at 1.5%.
Select the “bank account” to link it from the payment method selection.
Choose Wire Transfer, and select the amount that you wish to transfer. After that, follow the steps, but do not forget to include a reference code that Coinbase will generate.
This process takes about 24 hours to complete, but once this is done, your account should have received the exact amount that you have selected.
To do this, you need to visit your dashboard and locate the “BUY/SELL” Tab at the top left corner.
Once you click on this, you will be able to determine the amount of cryptocurrency you plan to buy or sell.
After entering the amount of the currency, you will notice a payment methods drop-down menu, where you can select your card. End the process by confirming that the order is correct and click “Complete Buy.”
In a few minutes, the desired amount of cryptocurrency will be added to your selected wallet.
Selling cryptocurrencies is just as easy
In the same “BUY/SELL” Tab, you can choose the SELL option and choose a wallet from which you want your coins to arrive.
Next, you need to choose where you want your coins to be deposited.
Checking your balance
Checking the balance on Coinbase is also very simple, and you can do it by logging into your Coinbase account. Once you enter your login credentials, you will be taken to the dashboard. On the lower left side of the screen, you should see a section titled “Your Portfolio.”
Underneath, there is a list of cryptocurrencies available on Coinbase, as well as the amount of each of them that you currently own. Under the list of digital currencies, there is a field that displays your total balance in USD. Besides, you can also check your balance by clicking on “Accounts,” which is located next to the “BUY/SELL” option.
Deposits and Withdrawals
In order to fund your account on Coinbase, you can deposit funds from another exchange or wallet. You can do this by following these steps:
- Open the trading view
- Find the Deposit button located under Assets in the left-hand column
- Select the currency that you wish to deposit from the Currency Type drop-down menu
- Copy the account address that is displayed. This is the address that will be associated with your account from now on, and all digital currencies that are sent to this address will be added to your account.
- Finally, go to your external wallet where you wish to take currency from. Enter the unique address, but keep in mind that it needs to correspond to a specific digital currency (BTC can only be sent to the BTC address, the same goes for other coins), and send.
For withdrawing to another exchange or a wallet from Coinbase, obtain a destination address, and follow these steps:
- Open the trading view at Coinbase
- Select the Withdrawal option located under Assets
- Select the currency that you wish to withdraw from the Currency Type drop-down menu
- Enter the destination address in the Destination field
- Enter the amount you want to withdraw, and click on the Withdraw option